A tax revolt might be underway amongst South African citizens

10 September 2019Consultancy.co.za

Prominent corruption has significantly dented trust in the South African government, which – among other repercussions – has brought about a sentiment of tax revolt amongst the public. This is according to Senior tax Attorney at Tax Consulting SA Jean du Toit, who says the revolt is well underway.

The claims come after the new commissioner of the South African Revenue Service (SARS) also claimed that the tax collection woes in South Africa might be a result of deliberate mass disobedience amongst a disillusioned populace. According to Kieswetter, the revolt is yet to come, but du Toit claims that it has already arrived.

Public coffers in South Africa have been under considerable strain in recent times, primarily as collection rates fall remarkably short of expected revenue in the country. The government has been looking to rectify this scenario through a number of measures that vary in their stringency.

A hike in tax rates has been the short-term solution, to ensure that government revenues continue to be replenished, while some long-term solutions have included more severe and humiliating punishments for defaulters. However, citizens appear to be united in their refusal to pay tax.

Du Toit reports that there are a number of different motivations behind a tax revolt, and a number of different manifestations thereafter. The first and most obvious type of tax revolt is the illegal variety, which involves refusal to pay taxes and an insistence on defaulting, for a number of reasons.

“Under a tax revolt, one may broadly identify two types of taxpayers; those who simply do not and never have paid taxes, perhaps out of disdain for the very concept thereof and those who, from some misguided sense of virtue, feel justified in discontinuing their tax obligations,” explains du Toit.

“In the latter case, the taxpayer somehow legitimises their behaviour, often because they do not think they have to contribute to a leaky bucket, or they feel they have already contributed more than their fair share,” he added.

More legal forms of tax revolt appear more underhanded. The most dramatic manifestation of this type of tax revolt, according to du Toit, “would be to cease your tax residency, in which case SARS would no longer have a claim to your worldwide income and capital gains.” Currently, SARS is dealing with a rapidly increasing share of such cases.